Cakes supplier Avana Bakeries is to close by the end of the summer.

The future of the 2 Sisters-owned plant in Newport, which employs around 650 staff, had been in doubt since losing a major M&S contract to Park Cakes.

This prompted a 45-day consultation period, and the business today announced it had not been able to find a way to keep the site viable.

“We have fully explored all the options available to us since losing what was the principal customer contract for the site,” it said in a statement. “Our priority now is to minimise the number of compulsory redundancies through seeking volunteers and redeployment elsewhere.”

2 Sisters said it would also work with the Welsh Government, Job Centre Plus and Staffline to seek opportunities for its former staff.

“We will now work with all our colleagues and our customers to implement a phased closure, which we anticipate will end by summer,” it added.

Oldham-based Park Cakes is already a major M&S supplier.